Green Economy Financing Facility Programme

What is the EBRD?

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• Multilateral financing institution (1991) to support transition to market

economies

• The EBRD is owned by 67 countries from five continents, and the EU and EIB.

These shareholders have each made a capital contribution, which forms our core

funding. • €30 billion capital base

• €41 billion portfolio

• €9.5 billion average annual business

in the past 3 years

3 key operational principles

• Sound banking

• Transition impact

• Environmental sustainability

The EBRD has adopted a sequence of cross-sectorial

strategies to mainstream green financing across

operations and increase the Bank’s share of green

finance (> 40% of business volume in 2017)

EBRD’s strategic approach

BUSINESS MODEL

The EBRD extends credit lines to local financial institutions to provide finance to small and

medium-sized businesses, corporates or households for high performance climate and

environmental technologies

Local implementation teams enable greater

outreach to clients that need green technology

solutions

Project development support helps identify eligible

technologies and quantify the benefits (climate

mitigation, adaptation or other environmental

benefits)

Awareness and capacity raising helps local

markets recognise green opportunities and assess

the financing potential

GEFF business model

Technical expertise Financial institution

EBRD

Beneficiaries

Client outreach and verification support

Credit line with eligibility criteria

Fresh commercial finance opportunities

Project development and optimisation tools

Guidance and quality assurance management

European Union

is a key partner and donor

for EBRD GEFF Programmes

GEFF investment areas

Private industrial and

commercial sector Small businesses

Mid-sized corporates

Residential sector Individuals

SME/corporates in construction

Municipal infrastructure

and services Private service providers

Municipalities and municipal

companies

Agriculture Production

Commerce Manufacturing

Multi-family

buildings Individual

dwellings

Public

buildings

Public

transport

Street

lighting

Waste and

waste water

treatment

TA COMPONENT

TECHNICAL ASSISTANCE

Under the EBRD’s supervision, dedicated local implementation teams carry out:

• Technical Eligibility Checks

• Facility Management (Operations Manual, MIS)

• Product Development support and training

• Originating new client opportunities

• Marketing toolkit (website, case studies, templates and guideline)

• Verification

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Identifying eligible technologies

Assessment-based

Best practice experience determines reference standards (baseline)

On-site involvement of technical experts identifies potential solutions

Detailed assessment report (technical and financial opportunities and risks)

Technology-based

Pre-identifies high performance technologies in specific markets

Technologies are eligible for EBRD financing via local financial institutions

Enhances local market awareness of efficient solution availability

Recognised technologies enable faster finance processing

Transaction costs are reduced for all parties

Technical Eligibility Check 1) Project Assessments

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Project Assessments are carried out by consultants for PFIs and their clients.

Only available for complex investments and supplier/vendor loans that are not automatically eligible for financing through the Technology Selector.

• Unbiased assessment & advice

• Confirms viability of the project

• Mitigates risks

• Ensures technical feasibility

• Ensures application of health & safety and environmental standards

• Ensures technology is fit for purpose

Technical Eligibility Confirmation 2) Technology Selector

The EBRD helps PFIs with financing green technologies (high-performing

technologies that are both affordable and environmentally neutral) so

that such solutions will be replicated and scaled up on commercial

terms under local market conditions.

The EBRD sets technology eligibility

criteria

The EBRD sets the eligibility criteria based on

the extent to which each specific technology

performs beyond the reference baseline

according to:

•Technological progress

•Maturity of market supply

•Market penetration rates

•Technology costs

The EBRD confirms technical

eligibility through

• Technology Selector for simple technologies

• For complex projects, local implementation

experts conduct Project Assessments:

‒ Preliminary Assessments

‒ Further assessment and advice if more

complex investment ideas required

The EBRD sets the minimum

performance threshold

• Energy efficiency projects: minimum 20%

energy savings.

• Renewable energy projects: technology and

market specific

• Water and resource efficiency: technology

and market specific

High

performing

Affordable Neutral environmental

impact

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Eligible technologies…

• Windows & Doors

• Insulation material

• Boilers

• CHP

• Heat Pumps

• Chillers & Cooling

• Motors & Pumps

• Domestic Appliances

• Transport

• Process technologies

• Lighting

20% improvement of performance

Local vendors & suppliers

Fair competition

Available in the market

Examples of sub-categories:

• Biomass boilers

• Solar thermal

• Solar photovoltaic

• Electric battery storage

• Fuel cells

• Low carbon transport

solutions

We are looking to include more high

performance technologies for (but

not limited to):

• Waste treatment and disposal

• Waste minimisation and

recycling

• Efficient water use and treatment

• Soil quality and advanced

agriculture

• Reducing local pollution

• And many more…

Developed with support from

Developed with support from

Benefits

• Technology manufacturers:

Local marketing channel – high performance standards

Increased sales and brand awareness

• Technology vendors:

Compare product performance to best-in-class

Find additional products to offer or import

• Technology users:

Locally available, best-in-class products

One-stop-shop – products are eligible for finance

Other benefits

• Reaches tens of thousands of businesses and households

• Reduces transaction costs for all parties

• Performance standards rise and make a real impact

• Activates local networks of technology providers

• Attracts available green finance via EBRD GEFFs

• Accelerates deployment of high performance technologies

ts.ebrdgeff.com

Facility Management and Monitoring

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The EBRD have a number of tools that ensures efficient rollout, facility management and monitoring, including:

• Dedicated full time staff managing each facility

• Operations manual and standard templates for all stakeholders

• Marketing and sales tools

• Tailored training packages (eLearning under preparation)

• Dedicated websites

• MIS

PFI Product Development Support and Training for Loan Officers

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90% of training participants: “very useful” or “extremely useful” (EBRD evaluation study, 2016)

Portfolio Screening

To identify most promising

costumer segments

GEFF Product Design

Support in designing GEFF product

features

Capacity Gap Analysis

Define capacity building needs and

agree on training plan

E-Learning

Participate in EBRD Green Finance

Academy E-Learning Programme

Face-to-Face Training

Face-to-face training courses to

close know-how gaps

Train-the-Trainer

Train-the-trainer program to ensure

sustainability

Client Origination

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Hotline to answer FAQs

Joint client meetings and site-visits to advise on investments

Advise staff on cross-selling opportunities

Marketing through Vendors

Scale up business through vendors’ distribution channels

Greater advertising opportunities

Convenience for clients

Straightforward via Technology Selector

Marketing Toolkit

10 October, 2018 22

Website – EBRDGEFF.com

Brochures

Technology Selector

Launch event and award ceremonies

Case studies, videos

Presentations

Press releases

TRACK-RECORD & SELECTED EXAMPLES

EBRD GEFF Programme – Cumulative Results

More than

130 participating financial institutions

Over

€4 billion of EBRD finance

Avoiding more than

7 million tonnes of CO2 emissions per year

Know-how in

24 countries across Central and Eastern

Europe, Central Asia and the

Caucasus

Over

10 years of experience and know-how in

green banking

Engagement with

130 local financial institutions

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Experience gained from

12 years of programme refinement

Operational in

25 countries of the EBRD region

Providing over

€4 billion of EBRD finance

Supporting more than

130,000 green investments

RoSEFF

No of PB participating 4

Volume of EBRD finance disbursed EUR 60 mil.

No of sub-projects financed 340

EU incentives disbursed to end borrowers EUR 7.4 mil.

EU-funded Technical Assistance EUR 3.7 mil.

Annual CO2 Emission Reduction, tonnes CO2/annum 116,076

Annual Energy savings (MWh/y) 317,143

PolSEFF

No of PB participating 6

Volume of EBRD finance disbursed EUR 210 mil.

No of sub-projects financed 2,111

EU incentives disbursed to end borrowers EUR 18.8 mil.

EU-fundedTechnical Assistance EUR 8.1 mil.

Annual CO2 Emission Reduction, tonnes CO2/annum 110,350

Annual Energy savings (MWh/y) 364,551

GEFF ADDED VALUE

CREATING AN ENABLING ENVIRONMENT

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INCUMBENT

TECHNOLOGY

ALTERNATIVE

TECHNOLOGY

Opera

ting C

ost

s

Reduce height of

barrier

• Awareness of alternative

• Awareness of benefits

• Access to finance

• Administrative burden

• Technical risk

• Implementation risk

Pote

nti

al

cost

reducti

on

Time

Market barriers (e.g. early-mover costs, entrenched behaviour and information asymmetries), may

increase transaction costs affecting the rate of adoption of high performance technologies.

Access to broad knowledge base is often the greatest transaction cost to making an informed investment

decision.

OFFICIAL USE

CHALLENGING ENTRENCHED BEHAVIOUR

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Entrenched behaviour restricts uptake and favours smaller upfront investment cost typically associated with lower performance technologies.

The EBRD GEFF model seeks to change this behaviour by:

• increasing awareness of multiple benefits of higher performance technologies

• establishing minimum performance criteria so easier to identify and select higher performance technologies

• demonstrating cost-effectiveness of investing in green economy solutions for process modernisation, equipment upgrades and building refurbishment

• illustrating the business case for using commercial sources of finance for solutions otherwise constrained by affordability

• partnering with local financial institutions to instil competition and target a far greater number of clients than the EBRD could influence directly.

OFFICIAL USE

GEFF BUSINESS PROPOSITION

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EBRD GEFFs de-risk the introduction of green financing products. Through GEFFs, financial

institutions gain the ability to:

• access a knowledge-base of high performance solutions that result in clear environmental

benefits beyond business-as-usual

• enhance client competitiveness by focusing on improving the quality and capacity of their

activities

• originate new investment opportunities that are a business priority for clients

• attract / retain clients that want to increase their competitive advantage

• reduce project risk via technical due diligence and verification services

• use EBRD GEFF programmatic know-how to reduce upfront costs of investment in development

of green financing activity.

OFFICIAL USE

• There is a successful model and track record of implementation in Romania and +24 countries with

approx. EUR 4 billion committed so far. The business concept delivers an important leverage effect

(typically at least 5x)

• By combining and integrating commercial loans with TA and small grants linked to high performance

equipment and technologies under a one-stop-shop umbrella, we are addressing market barriers in a

concerted way and using hundred of branches in partner banks’ networks as distribution channels to

reach a significant number of beneficiaries

• EBRD stands ready to structure and implement another programme for energy and resource

efficiency investments for Romanian enterprises via local partner banks. We are currently looking for

a source of donor funds to support the TA and incentives – one potential source in Romania as well

as in other Member States could be the national environmental funds.

Thank You! Stefania Racolta-Cruceru Head of EU Green Finance and Climate Analytics EBRD Energy Efficiency and Climate Department racoltas@ebrd.com +442073386123